2019
Young International Freight Forwarder of the Year
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‘Big Irrigation and Infant Formula’
Table of Contents Page
Introduction 3
Acknowledgements 3
Import Case Study – Big Irrigation 4
Overview 4
The Import Process 5
The Clients Requirement 6
Shipment Restrictions and Parameters 7
Transport Restrictions 7
Supplier’s / Consignor restrictions 7
New Zealand Delivery restrictions 8
Australian Transport and Handling 8
Sea Freight Process 9
New Zealand Import Formalities 11
Customs Clearance 11
Lodging documentation at Lyttelton Port 12
Ministry of Primary Industries (MPI) 12
New Zealand Transport and Handling 13
Conclusion / Recommendation 14
Export Case Study – Infant Formula 15
Overview 15
The Clients Requirement 16
Shipment Details 16
The Export Booking Process 17
Known or Unknown Shipper Status 17
Booking the cargo with the airline 18
Risk Management Programme ‘RMP’ 18
Source Eligibility Document ‘ED’ 19
Animal Products (AP) E-cert / Health Cert / Phytosanitary Cert 19
China Customs – Import Compliance 21
China Customs – Free Trade Agreement 22
Airline Compliance 23
China Sample Inspection 24
Pre Alert to destination Agent 24
Export Documentation Summary 25
Conclusion / Recommendation 26
Reference list (Harvard Reference List) 27
Bibliography 29
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Table of Contents (ctd) Page
Appendices 30
Appendix A - A single GRP Pipe being manufactured in Australia 30
Appendix B - A single GRP pipe being lifted off truck onto vessel 30
Appendix C - GRP Pipe being lifted by port crane onto vessel 31
Appendix D - Above Deck stow of GRP Pipe on charter vessel 31
Appendix E - Ships hold stow of GRP Pipe on Charter vessel 32
Appendix F - Truck unloading onsite at New Zealand laydown area 32
Appendix G - Image of the New Zealand laydown site 33
Appendix H - GRP Pipe placed in final position for installation 33
Appendix I - Farm to Consumer supply chain snapshot 34
Appendix J - Infant Formula manufacturing facility 34
Appendix K - Infant formula being palletized for distribution 35
Appendix L - Example of a Unit Load Device ‘ULD’ 35
Appendix M - Example of Phytosanitary Certificate 36
Appendix N - Example of Certificate of Origin 37
Appendix O - Example of Manufacturers Declaration / Free Sale 38
Appendix P - Finished Product on the shelf in China 39
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Introduction
This dissertation will provide a breakdown of two exceptionally complex international
freight movements. The first case study titled ‘Big Irrigation’ will examine the
logistical technicalities related to the importation of over 45,000 m3 out of gauge
irrigation pipes using a chartered sea freight breakbulk vessel. These pipes are
being shipped from Adelaide Australia into Christchurch (Lyttelton Port), New
Zealand.
The second case study titled ‘Infant Formula’ will breakdown the regulatory
intricacies related to the export of Infant Formula (Milk Powder) from New Zealand to
China by air freight. It clarifies each step of the export process within this complex
industry and explains how the physical cargo and supporting compliance
documentation interlinks from the manufacturer to final mile delivery.
Acknowledgements
I would like to acknowledge my employer for their unwavering support throughout my
career and encouragement to apply for this opportunity.
I wanted to thank CBAFF of New Zealand for the opportunity to be recognised as the
New Zealand Young Achiever winner and the opportunities that has provided me in
my career including a trip to Singapore to visit the sea port and air terminal along
with additional industry training and support services, I also acknowledge them
having confidence in me to put forward my dissertation to FIATA.
Lastly I wanted to thank FIATA for this career enhancing opportunity. Thank you.
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Import Case Study – Big Irrigation
This case study will detail the full process of importing breakbulk cargo on a charter
vessel service.
The information and experience was gathered first-hand as the shipment request
was factual. Researching the various technical service and pricing possibilities for
this shipment included engaging multiple service providers and authorities across the
supply chain spectrum to generate and execute this import solution for my customer.
Overview
My client is a leading New Zealand importer, manufacturer and installer of Glass
Reinforced Plastic Pipe (GRP) used for a diverse range of pipeline systems. They
were successful in the tender for the Central Plains Water Irrigation (CPWI) Scheme
(Stage 2). (CPWL, 2017)
To provide insight, the Central Plains Water Irrigation Scheme is a large-scale
project for water diversion, reticulation and irrigation for the Central Plains of
Canterbury. The CPWI projects remit is to supply water to all shareholder farms
signed up to the scheme. The fundamental establishment of the CPWI scheme is
based around the diversion of water through constructed tunnels and a series of
canals and water races to supply water for irrigation to an area of 60,000 hectares on
the Canterbury Plains, New Zealand. Water is drawn by an intake at the Rakaia
River which directs water into a 17,000m long gravity fed headrace along the plains
to convey water north and into a reticulation system. This piped reticulation system
provides pressurised water to all shareholder properties in the scheme area so they
can have a reliable source of water for crop irrigation. (CPWL, 2017)
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By successfully securing the multi-million dollar contract, my client was tasked with
sourcing and supplying over 25,000 meters of various sized GRP pipe, which forms
stage 2 of the CPWI network.
The product was manufactured at a facility in Adelaide, South Australia and needed
to be imported under ExWorks (EXW) shipping terms to two laydown sites in
Darfield, Canterbury, New Zealand.
The Import Process
In order to accurately convey the process, interactions and variations involved in this
complex import shipment, I am going to breakdown the shipment into the following
sub-headings:
The Clients Requirement
Shipment Restrictions and Parameters
Australian Transport and Handling
Sea Freight Process
New Zealand Import Formalities
New Zealand Transport and Handling
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The Clients Requirement
My client was awarded the contract to source, supply and install over 25,000 meters
of Glass Reinforced Plastic Pipe (GRP). The manufacturing facility was located 40
kilometres away from the Port of Adelaide, Australia and the pipe had to be delivered
to two laydown sites in Darfield, Canterbury.
There were three sizes of pipe, the largest being over 2.6 meters in diameter and
13.5 meters in length. Fortunately, the two smaller sizes of pipe can be nested inside
each of the larger pipes, automatically reducing the shipping footprint by two thirds.
There was a total of 530 bundles of pipe, each nested bundle had the dimensions of
13.5m (length) x 2.6m (diameter) and weighed a total of 23,000kg.
As an overview, they shipped a total of:
530 nested bundles
48,368 m3 / 12,190,000 kg
The schedule of supply and delivery deadline was dictated by my client. Due to the
diameter of the pipe, containerised shipping was not an option as the pipes outside
dimensions meant it would not fit inside a 40ft high cube or open top container, so it
needed to move as breakbulk cargo. Due to a tight delivery deadline, my client
directed the shipment to be exported in the following sequence:
Sailing 1 = 150 Bundles
Sailing 2 = 380 Bundles
As their nominated International Freight Forwarder, I was tasked with sourcing their
end to end logistics requirements to ensure a seamless, on time and cost effective
supply chain solution.
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Shipment Restrictions and Parameters
Due to the complexity of the shipment, there were already a number of characteristic
restrictions at play.
Restrictions specific to this particular import included:
Transport restrictions
The supplier’s location was 40km from the Port of Adelaide. Due to the pipe bundles
diameter, each pipe required its own dedicated truck to cart from the suppliers yard
to the Port. This involved a 2 hour round trip to complete a single delivery. Due to the
number of deliveries and trucks required, it was impossible to have a continuous
supply of trucks with pipes on deck to be available under the ships hook to be loaded
onto the vessel. If there were delays in loading we would have incurred significant
penalties for every hour beyond the agreed time allocation.
The supplier was also restricted in their ability to supply and load any more than 20
trucks per working day. As a result I needed to explore alternative transport
strategies.
Supplier’s / Consignor restrictions
Unfortunately, the supplier was unable to store all of the bundles of pipe in their yard
due to site capacity constraints. Consequently, we needed to arrange double
handling (cartage) of the pipe from their yard to the storage yard, ‘staging area’. This
required sourcing over 13,000 m2 of vacant storage area close to the port.
In addition we had to source and contract additional labour and equipment to
manage unloading the trucks at the staging area and the associated handling in and
out of storage.
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New Zealand Delivery restrictions
Due to the area where the pipes are being delivered in Canterbury, there were site
specific access restrictions. This reduced the delivery window to specific months of
the year, so that access is not impeded by swollen rivers and muddy ground -
common over Canterbury’s autumn and winter. Subsequently, we had a restricted
delivery window which further limited our supply chain charter sailing options.
Australian Transport and Handling
In this segment, I am going to detail the supply chain strategy that was implemented
in order to successfully move the manufactured pipes from the suppliers yard via a
staging area and ultimately under the ships hook for loading onto the vessel.
Discussions were held with the supplier about a realistic production model so we
could accurately source, cost and supply a viable trucking solution. The supplier
confirmed they were able to load 20 pipe bundles per day onto trucks, using their on-
site crane. Calculating a 2 hour round trip, supplier operational hours between 0730
and 1530, 5 days per week and a maximum supply of 20 pipes per day. I determined
a single truck could run 4 pipes per day, therefore we required a minimum of 5 trucks
operating per day to provide a recurrent flow of pipe from the supplier’s yard to the
staging area. The impact of the supply constraints meant the above transport
solution was operational for more than 26 working days over the course of the
project.
Understanding the delivery constraints, timelines and deadlines, I made a number of
phone calls in an attempt to source a storage / staging area that was available and
equipped to handle the volume and requirements of this project.
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I successfully managed to source a staging area at Flinders Ports on berth 18 at Port
of Adelaide. This location was ideal as it was very close to where I arranged a
charter vessel to berth and load. The cost of the staging area was negotiated at a
weekly per m2 footprint rate. The project utilised the staging area for 22 weeks with a
peak utilization of 13,000m2.
Following on from sourcing the delivery and staging area, I managed to track down a
reputable and experienced Stevedoring company who can handle the various
staging area requirements.
These tasks included:
Coordinating acceptance of the delivery trucks into staging area
Unloading the pipe bundles off each truck
Sourcing cranes and associated equipment for handling pipe
Planning the storage layout of the pipes in the staging area
Double Slinging each pipe bundle in preparation for vessel loading
Handling the pipes from the staging area to under the ships hook for loading
(Dept. Immigration and Border Protection, 2017)
Please refer to Appendix A, B and C for related images.
Sea Freight Process
In combination with formalising a plan for the Australian landside requirements, I also
had to source the shipping service that would transport the cargo from Port Adelaide
to Lyttelton Port. I engaged in communication with a number of breakbulk carriers
and charter brokers to see what options were available that met our requirements. I
discovered that although the standard breakbulk carriers were more adaptable to
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offer services and simplified solutions, their pricing was a lot higher in comparison to
alternative options.
In the end I was presented with a ‘part charter’ option that had two sailings (on two
different size vessels). This part charter option was linking into a service that was on
a similar timeline on its way to Auckland.
Having a viable solution, I then established explicit service requirements and
negotiated a price between my company and the charter broker. Terms and
conditions were agreed upon by all parties involved and a ‘charter party’ was signed.
A charter party being “Hire or lease contract between the owner of a vessel (aircraft
or ship), and the hirer or lessee (charterer). Under a charter party, a vessel is rented
(in full or in part) for one or more voyages (voyage charter) or for a fixed period (time
charter). Normally, the vessel owner retains rights of possession and control while
the charter has the right to choose the ports of call. Also called charter agreement or
charter contract, and written also as charter party” (WebFinance, 2017)
The vessel was then scheduled to make a diversion on route to Auckland, New
Zealand by calling into Adelaide Port, Australia to collect the bundles of pipe and call
at Lyttelton Port, New Zealand.
Please refer to appendix D and E for related images.
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New Zealand Import Formalities
Customs clearance:
In essence the customs clearance process is the same as a standard ‘general cargo’
import customs clearance. The data is transmitted electronically to NZ Customs and
Ministry of Primary Industries ‘MPI’ from EDI Cargowise through the Trade Single
Window ‘TSW’.
“The TSW is part of the Joint Border Management System (JBMS) managed by
Customs and MPI. TSW uses new lodgement message formats based on the latest
World Customs Organisation international data model (called WC03). These
message formats combine the information requirements of all agencies as much as
possible, enabling agencies to share the information provided. For imports, the new
messages combine Customs and MPI information requirements in one lodgement.
This means you do not have to send an import entry to Customs, and a separate
Biosecurity Authority Clearance Certificate Application, or permit information for
prescribed foods, to MPI”. (NZ Customs Services, 2013)
In preparation for customs clearance, our in-house customs broker ensured we had
the following documentation:
A shipment Bill of Lading
A commercial invoice and packing list
A quarantine declaration – in this instance confirming the breakbulk was clean
at time of loading
A Trade Single Window client code and a supplier code
A declarant code and unique user identifier (UUI). (NZ Customs Services,
2014)
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The pipes were then classified by our customer broker as:
HTC Tariff: 3917.39
Description: Flexible plastic tubes, pipes and hoses
Duty Rate: 0% - as manufactured in Australia. (Under the AANZFTA)
(NZ Customs Services, 2015)
Lodging documentation at Lyttelton Port
In order for the successful arrival and receipt of the vessel, the ships agent in New
Zealand lodged the necessary documentation and information with the Port
Managers Department at Lyttelton Port. This included:
Cargo Manifest
Ships Bills of Lading
Confirmation of cargo description and requirements
Vessel particulars
Confirmation items were not deemed high risk or Dangerous Goods
Ministry of Primary Industries (MPI)
As the pipe is new, MPI automatically deemed the consignment low risk based on
our electronic lodgement of information via the TSW. We expected to receive
biosecurity clearance without inspection however in this instance, due to the size of
the shipment, MPI decided it was prudent to undertake an inspection of part of the
shipment. A Biosecurity Authority Clearance Certificate (BACC) was issued by MPI
subject to MPI inspection upon arrival into Lyttelton Port.
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Once the vessel had berthed, MPI undertook a physical inspection of the cargo and
were satisfied the cargo was free of any biosecurity risks. The BACC was updated
and re-issued granting a full MPI release into NZ. (NZ Customs Services, 2017)
New Zealand Transport and Handling
Once the cargo had been released by NZ Customs and MPI, we were permitted to
arrange final delivery of the product from Lyttelton Port to the two laydown sites in
Darfield, Canterbury.
The NZ cartage and handling requirement was very similar to that required in
Australia, whereby due to time constraints with how long the vessel was berthed in
port, we needed to operate a hub and spoke delivery model taking the product off
the port, to a nearby staging area. Once at the staging area, the cargo was unloaded
and stored pending final delivery.
The main challenge with domestic transport, was being able to source a large fleet of
trucks to continually be available under the ships hook and to arrange cartage to the
staging area.
Thankfully, the transport hub and spoke model was a success and we did not incur
any penalties for the vessel unloading being delayed.
The pipes were ultimately delivered to the two laydown sites on time and in-tact. The
client was very happy with the overall handling, communication and execution of the
project.
Please refer to appendix F, G and H for related images.
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Conclusion / Recommendation
In conclusion, sorting competitive and reliable service options for an ExWorks
breakbulk shipment of this nature is very complex. It is very difficult ensuring you
have every technical aspect of the supply chain process controlled so that when the
shipment is executed, there are no unconsidered costs that arise.
In addition, when dealing with breakbulk cargo (or any freight for that matter), you
need to complete ample due diligence to ensure the shipping lines, stevedores and
trucking companies involved have relevant experience and infrastructure to ensure
the overall accomplishment of the shipment.
My recommendations are to start the breakbulk process considering all possible
options and methods to import the cargo. I found as I worked through the various
service, pricing and handling methods, there were service combinations that
complemented each other to offer increased logistics synergies.
I also believe in simulating the supply chain process and discussing possible risks
and delays with contracted parties. This way, it better helps me understand and
comprehend the particulars of the movement and recognise what variables may
arise and possible solutions.
With a shipment of this nature, my main recommendation would be to focus on the
preparation as once the cargo starts to move, it is very difficult to make wholesale
changes should issues arise.
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Export Case Study – Infant Formula
Overview
Infant formula is an alternative for breast milk for feeding infants. New Zealand has a
reputation for the manufacture and supply of the world’s highest quality milk powder
products, which over the past 10 years has been a thriving export commodity for
New Zealand.
Underpinning this demand was due to China's 2008 melamine scandal, in which six
babies died and around 300,000 became sick after consuming locally manufactured
dairy products tainted with the industrial chemical. This resulted in the virtual
collapse of the country's (China) domestic formula industry and a huge spike in
demand for imported products. ("NZ infant formula status at risk, say big players",
2019)
Since 2008, the demand from China’s growing middle and upper class for New
Zealand’s highest quality infant formula has exploded. Initially when the demand
arose, New Zealand and China did not have robust manufacturer and supply chain
monitoring to ensure the highest reliability and procedures were being adhered to.
In August of 2013, the potential volatility of this loosely monitored industry was
brought to the world’s attention when one of New Zealand’s prime infant formula
manufactures internationally recalled over 900 tonnes of contaminated product which
placed New Zealand’s clean reputation under threat. ("NZ's dairy reputation under
threat", 2019)
As a result of this scare, the international regulations surrounding this industry
(especially between China and New Zealand) were significantly tightened.
In the following dissertation, I am going to breakdown the complex regulations and
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requirements associated to the exporting of infant formula from New Zealand to
China by air freight.
The client’s requirement
My client is a New Zealand based manufacturer and exporter of milk powder and
infant formula products. For your understanding, please refer to ‘appendix I’ for a
snapshot of the traditional ‘farm to consumer’ supply chain model of this commodity.
As the nominated international freight forwarder, our remit is to provide logistical
services from their storage facility based in Canterbury, New Zealand through to the
end consignee who is based in Guangzhou, China.
Shipment Details
The client has provided the following details as an overview of their export
requirement:
Cargo Ready Date: 20th January 2019
Shipment Commodity: Infant Formula
Shipment Size: 3 Pallets, each to contain 300 x cans of infant formula
Dimensions: 120 (L) x 100 (W) x 130 (H) cm - per pallet
Weight: 374kg per pallet
Inco Terms: Terms DAP including Customs Clearance
Collection address: ##### Storage Facility, Canterbury, NZ
Airport of Departure: Christchurch, New Zealand (NZCHC)
Airport of Destination: Guangzhou, Peoples Republic of China (CNCAN)
Delivery address: ##### Storage Facility, Guangzhou, CN
Consignee: ##### #####, Guangzhou, China
Please refer to appendix J and K for related images.
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The Export Booking Process
Known or Unknown Shipper Status
Firstly we establish if the Shipper is a ‘known shipper’ with our company. This is vital
to distinguish as it will effect what is included in our quotation for services and how
shipment is loaded to be presented to the airline.
For example, ‘unknown shippers’ cannot be Unit Load Device ‘ULD’ loaded, this is
for screening purposes, as a ULD is fully sealed, there is no way to screen as per
Regulated Air Cargo Agents ‘RACA’ regulations. ("Air Cargo | Civil Aviation Authority
of New Zealand", 2019)
To present the cargo as a ULD load you would have to manually screen each carton
(very time consuming) then you are permitted to load the ULD and export as a
known shipper. Once the shipper has completed 3 x unknown screened shipments
and completed a known shippers form – then screening will no longer apply. For x-
ray loading the maximum weight per skid is 200kgs and each Cargo Terminal
Operator ‘CTO’ has specific dimensions for x-ray screening – or alternative
screening will apply which will involve staff delivering product to the CTO and having
the detection dogs scan the product which then requires the skids to be wrapped and
sealed again.
Fortunately in this instance, the client is a regular exporter of air freight with our
company and has a ‘known shipper’ status.
Please refer to Appendix L for related image.
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Booking the cargo with the airline
The booking of the airfreight shipment is made with the desired airline representative
and due to the commodity, we have been provided with a ‘commodity based’ freight
rate for milk powder rather than a ‘general cargo’ freight rate.
Risk Management Programme ‘RMP’
New Zealand's reputation for producing exceptional, high-quality food is fundamental
to our exporting success. The New Zealand Ministry of Primary Industries helps
exporters meet the standards demanded by consumers in over 200 global markets.
(Industries, 2019)
The Risk Management Programme ‘RMP’ forms a part of this standard. An RMP is a
written programme designed to manage the hazards, wholesomeness and labelling
of animal material and products. Hazards may be biological, chemical or physical.
The RMP describes how the manufacturer will process their products to meet the
requirements of the Animal Products Act 1999. This is to ensure the products sold
are 'fit for purpose' – safe, suitable and truthfully labelled. (Industries, 2019) To
ensure compliance with RMP, we need to ensure the consignment is being collected
from a registered RMP approved storage facility. Furthermore the truck collecting the
consignment and the depot who are tendering the cargo to the airline must also be
RMP approved. Due to the RMP requirement, we ensure the parties associated to
this consignment are RMP approved and are aware of the associated RMP
obligations. Once the cargo arrives into the RMP approved depot (before being
tendered to the airline), the consignment is required to be stored at the specific
temperature relative to the nature of the commodity. In this instance, infant formula is
to be stored at an ambient temperature.
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Source Eligibility Document ‘ED’
In conjunction with the RMP compliance, the supplier must raise a Source Eligibility
Document ‘ED’ to the approved RMP site. In essence the ED is a New Zealand
policy and procedure that keeps record of any persons or organisations handling a
specific product prior to export, consequently safeguarding and monitoring the
consignments supply chain integrity. Once the cargo has been inspected at the
airline handling agent, the ED is raised back to the exporter with the additional
information so they can apply for the Health Cert.
Animal Products (AP) E-cert / Health Cert / Phytosanitary Cert
Animal Products E-cert otherwise referred to as a Health Certificate or a
Phytosanitary Certificate is used for issuing export certificates for animal products
including meat, seafood, game, poultry, eggs, pet food, bee products, hides, wool
and skins, and dairy.
To use E-cert, a company must be:
a business with a registered Risk Management Programme
a registered exporter under the Animal Products Act 1999
an export-approved premises
acting as an agent for another company that is registered as one of the
above.
Export certificates are used to give official, government-to-government assurance
about products exported from New Zealand. They are issued by MPI when they are
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satisfied a product complies with the relevant regulations and requirements (from
New Zealand, as well as any extra requirements imposed by the importing country).
Statements on the certificates include information like:
the country of origin of the product and its ingredients
treatment or other processes the product has undergone, prior to export
the microbiological status of the product
the product's health status – for example, whether a certain animal or plant
disease is present in New Zealand.
Depending on what the importing country requires, export certificates can be issued
as:
printed documents on secure paper
digital information, transferred electronically from MPI’s system to their own.
(Industries, 2019)
In our situation, our client uses the updated ED information to produce the Health
Certificate online and submit this document electronically to MPI. Once this
Health cert has been reviewed and approved by MPI, a representative from my
company will call into our local MPI office and collect the original MPI stamped
Health Cert / Phytosanitary Certificate and send this certificate accompanying the
cargo in the airline documents pouch.
All supporting copies of this cert are made in black and white and then we place a
‘COPY’ stamp through the MPI logo, so these documents cannot be forged as
originals. This is also electronically stored on our EDI Cargowise system for
future reference. Please refer to appendix M for related image.
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China Customs – Import Compliance
From 1 January 2018, the Infant Formula registration requirements in the new Food
Safety Law came fully into force. Infant Formula products, either domestically
manufactured or imported through general trade, must obtain formula registration
before they can be sold in the PRC. ("New Era for Infant Formula in China | China
Law Insight", 2019)
For infant formula milk powder, the manufacturer needs to be registered with the
General Administration of Customs, P.R. China prior to export.
Due to the strict regulations in place now in China, these registrations are extremely
difficult to obtain, however my client is registered and conforms to this exclusive
requirement.
In addition to the above, the manufacturer, consignee and the product needs to be
registered with the Chinese government‘s website for ‘Imported food and cosmetic
importers and exporters’ prior to export.
According to AQSIQ and GACC Notice Foreign food manufacturer and exporters’
registration, all Foreign food producers, exporters and domestic consignees are
required to file their company information online with the Bureau of Import and
Export Food Safety of AQSIQ, China’s General Administration of Quality
Supervision, Inspection and Quarantine of the People’s Republic of China. This
requirement came into force with effect from 01 October, 2015 and annually renewal
in AQSIQ. ("Food register at AQSIQ for dairy|meat|wine|seafood|fruit|Drink", 2019)
As my clients main market is China, they are registered and compliant to all current
regulations specific for infant formula being imported to PR China.
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China Customs – Free Trade Agreement
In a world first for any developed country, New Zealand entered into a free trade
agreement with China in 2008, and with it came a unique competitive advantage.
The free trade agreement is a success story for both countries. It has opened up
significant trade and economic opportunities and has been a catalyst for closer
cooperation across a number of areas.
New Zealand goods exports to China have quadrupled since the free trade
agreement was signed and entered into force in 2008. China is now New Zealand’s
largest trading partner, with two-way trade valued at over NZ$28 billion in 2018.
China is also New Zealand’s second largest and fastest growing tourism market,
largest source of international students, and a significant source of foreign
investment. (Trade, 2019)
Issued electronically, these certificates of preference allow New Zealand exporters to
benefit from preferential duties and clearance provisions under these free trade
agreements;
NZ China Free Trade Agreement Certificates of Origin ‘NZCFTA COO’:
From 1 October 2016: New Zealand exporters will be required to provide the
NZCFTA COO number on the corresponding Export Entry either at time of
applying for Export Entry or by way of an amendment
From 20 December 2016: The data content of NZCFTA COO transmits in real
time to China Customs - New import procedures apply for importers in China
from 1 April 2017 with a transition period of 20 December 2016 - 31 March
2017 when both current and new procedures apply.
("Export Document Certification :: Auckland Chamber", 2019)
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Understandably, my client’s commercial sale and purchase contracts are heavily
weighted around the ability for the consignee to import this commodity at a
preferential duty rate so they produce and supply the NZCFTA COO accordingly.
In combination with this the client will also need to provide a CERT3 Manufacturer’s
Declaration to support Free Sale Certification. In essence this is a detailed list from
the supplier listing ingredients that matches all other supporting paperwork.
Please refer to appendix N and O for related images.
Airline Compliance
Different air freight destinations have differing levels of compliance. As a result, we
are required to seek airline compliance before tendering the physical cargo to the
airlines so they are not caught up in any regulatory issues whist the cargo is in their
control. As this shipment is travelling to Guangzhou we need to provide the airline
with copies of the Master Air waybill and the Health Certificate. This is so the
consignment can be cleared at the first point of entry into China. The airline lodges
these documents directly with China Customs and subsequently confirms back
approval. We generally aim to complete this step 48 hours before the consignment is
tendered to the airline.
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China Sample Inspection
Due to the nature of this commodity being infant formula, the strict regulations in
China require an inspection at the final destination (Guangzhou). Samples are taken
and sent to laboratory to ensure the product meets the exacting standards. The
documentation is also cross checked against the physical product to ensure it
matches descriptions, compliance and approved permits.
Pre Alert to destination Agent
Once all regulatory approvals and bookings are in place we provide pre alert
documentation of the shipment to our nominated freight agent representing our
organisation in China. They are then looped into the supply chain to assist with the
China Sample Inspection, Import Customs Clearance, cargo retrieval from the airline
and final mile delivery to complete a seamless end to end service.
Please refer to appendix P for related image.
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Export Documentation Summary
The following is a bullet point summary of the documentation and permissions
required for this shipment to be processed through all associated authorities through
the supply chain:
RMP Approval
Transport and Airline bookings
ED Compliance
Ecert – Health Cert / Phytosanitary Cert
Export Customs Clearance
NZCFTA Certificate of origin (Free Trade Agreement)
Manufacturer’s Declaration to support Free Sale Certification
Master Air waybill
Commercial Invoice
Packing List
Pre Alert
Airline Approvals
China Customs Approvals
Air freight Manifest
China Import Approvals and Permits – where applicable
China Laboratory Approvals
Translation of the Chinese label – where applicable
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Conclusion / Recommendation
The exportation of food grade products, especially those being consumed by infants
understandably comes with an extremely stringent supply chain model to ensure the
highest levels of product and supply chain data integrity. The complexities
associated to the end to end logistics of this commodity are substantial and it takes a
specialist freight forwarder who have a sound comprehension of all aspects to
ensure there shipments are accurately executed. My recommendation to a
commodity of this nature would be to ensure one hundred percent compliance to all
aspects of the end to end logistical solution. If compliance is not upheld it poses a
significant risk of cargo being declined entry into China and possibly having to be
destroyed. The risk to a New Zealand company trying to compete on a global scale
in the Chinese Market means there is little room for error, especially when marketing
a premium product.
So in conclusion, I would highly recommend any exporter in New Zealand of milk
powder products to complete extensive due diligence before committing to any
international freight forwarder. On the positive side, if they form a successful
commercial partnership with an international freight forwarder this could have
positive flow on effects for the demand of their products globally.
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Reference list (Harvard Reference List)
(Dept. Immigration and Border Protection, 2017) Australian Government,
Department of Immigration and Border Protection. [online] Available at:
http://www.border.gov.au/Busi/cargo-support-trade-and-goods/exporting-goods
[Accessed 06 Jan 2017].
(Flinders Ports, 2017) Flinders Ports Official Website. [online] Available at:
https://www.flindersports.com.au/ports-facilities/port-adelaide/ [Accessed 06 Jan
2017]
(WebFinance, 2017) Business Directory. [online] Available at:
http://www.businessdictionary.com/definition/charterparty.html [Accessed 06 Jan
2017].
(NZ Customs Services, 2014) New Zealand Customs Service Official Website.
[online] Available at:
http://www.customs.govt.nz/incommercial/preparingtoimport/submitentryform/Pages/
default.aspx [Accessed 10 Jan 2017].
(MPI, 2015) Ministry for Primary Industries Official Website. [online] Available at:
https://www.mpi.govt.nz/importing/border-clearance/containers-and-cargo/
[Accessed 09 Jan 2017].
(NZ Customs Services, 2013) New Zealand Customs Service Official Website.
[online] Available at:
http://www.customs.govt.nz/news/resources/factsheets/documents/jbmsfactsheetele
ctronic.pdf [Accessed 15 Jan 2017].
(NZ Customs Services, 2015) New Zealand Customs Service Official Website.
[online] Available at:
http://www.customs.govt.nz/news/resources/factsheets/documents/fact%20sheet%2
042.pdf [Accessed 13 Jan 2017].
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(NZ Customs Services, 2017) New Zealand Customs Service Official Website.
[online] Available at: https://www.mpi.govt.nz/importing/border-clearance/places-of-
first-arrival/seaports/
NZ infant formula status at risk, say big players. (2019). Retrieved from
https://www.nzherald.co.nz/the-
country/news/article.cfm?c_id=16&objectid=10889015
NZ's dairy reputation under threat. (2019). Retrieved from
https://www.radionz.co.nz/news/dairy2013/216135/nz%27s-dairy-reputation-under-
threat
Air Cargo | Civil Aviation Authority of New Zealand. (2019). Retrieved from
https://www.caa.govt.nz/air-cargo/
Industries, M. (2019). Food. Retrieved from https://www.mpi.govt.nz/exporting/food/
Industries, M. (2019). Overview. Retrieved from https://www.mpi.govt.nz/food-
safety/risk-management-programmes/overview/
Industries, M. (2019). About export certificates. Retrieved from
https://www.mpi.govt.nz/exporting/export-certification/about-export-certificates/
New Era for Infant Formula in China | China Law Insight. (2019). Retrieved from
https://www.chinalawinsight.com/2018/01/articles/corporate-ma/new-era-for-infant-
formula-in-china/
Food register at AQSIQ for dairy|meat|wine|seafood|fruit|Drink. (2019).
Retrieved from https://www.aqsiq.net/food-register.htm
Trade, N. (2019). New Zealand-China FTA overview. Retrieved from
https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-
force/china-fta/nz-china-fta-overview/
Export Document Certification :: Auckland Chamber. (2019). Retrieved from
https://www.aucklandchamber.co.nz/international/export-document-certification/
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Bibliography
Lyttelton Port http://www.lpc.co.nz/
Burnard International http://www.burnard.co.nz/
New Zealand Express Transport http://www.nzexpress.co.nz/
Qube Logistics http://www.qube.com.au/
RPC Pipe Systems http://www.rpcpipesystems.com/
Iplex Pipelines http://www.iplex.co.nz/
BBC Chartering https://www.bbc-chartering.com/
EDI Cargowise http://www.wisetechglobal.com/
Ministry of Primary Industries https://www.mpi.govt.nz/
NZ Customs Services https://www.customs.govt.nz/
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Appendices
Appendix A – A single GRP Pipe being manufactured in Adelaide, Australia
Appendix B – A single GRP pipe being lifted off truck onto vessel
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Appendix C – GRP Pipe being lifted by port crane onto vessel
Appendix D – Above Deck stow of GRP Pipe on charter vessel
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Appendix E – Ships hold stow of GRP Pipe on Charter vessel
Appendix F – Truck unloading onsite at New Zealand laydown area
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Appendix G – Image of the New Zealand laydown site
Appendix H – GRP Pipe placed in final position for installation
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Appendix I – Farm to Consumer supply chain snapshot
Appendix J – Infant Formula manufacturing facility
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Appendix K – Infant formula being palletized for distribution
Appendix L – Example of a Unit Load Device ‘ULD’
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Appendix M – Example of Phytosanitary Certificate
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Appendix N – Example of Certificate of Origin
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Appendix O – Example of Manufacturers Declaration to support Free Sale
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Appendix P – Finished Product on the shelf in China
Thank you for taking the time to read my report.